Facebook to Block Discriminatory Ads in ‘Historic’ Legal Accord

Facebook said it will make major changes to its rules for advertisers in order to settle a string of lawsuits alleging its platform enables discrimination in housing, credit and employment.

“Getting this right is deeply important to me and all of us at Facebook,” Sheryl Sandberg, the company’s chief operating officer, said in a blog post to be published Tuesday. The social media platform called the settlement “historic” and expressed gratitude to the National Fair Housing Alliance and the American Civil Liberties Union, two of the groups that sued it in the first place. “Today’s changes mark an important step in our broader effort to prevent discrimination and promote fairness and inclusion on Facebook.”

The partial resolution of long-running litigation over discriminatory ad strategies is a rare bit of good news for the embattled company. The Menlo Park, California-based internet giant, criticized for years about privacy breaches, hate speech and its use by Russia and others to interfere with elections, has been under intense scrutiny since last week when an alleged gunman livestreamed the mass murder of 50 people in Christchurch, New Zealand.

As part of the settlement, Facebook will no longer allow housing, employment or credit ads to be targeted to particular users by age, gender or zip codes. Facebook said it also won’t consider those categories when it creates “Lookalike” audiences—based on a profile of a company’s current employees or consumers—as a target for a particular ad.

Companies using Facebook to run housing, employment or credit ads will have to certify compliance with anti-discrimination laws. The ads will be vetted by Facebook for compliance, using both human staff and automation, the company said. People perusing the platform’s ads for housing opportunities will be able to look up those targeted at users around the country—even if they’re not one of them.

“It’s a huge deal,” said ACLU senior staff attorney Galen Sherwin of the settlement. “It will cause Facebook to make sweeping changes to its platform.”

Facebook said that, while the new restrictions may make it harder for some advertisers to achieve their goals, it doesn’t expect the changes to have a significant impact on its own revenue. The company said it still believes that advertising targeted at specific demographics can be appropriate in some, unspecified circumstances.

The settlement resolves three lawsuits and several Equal Employment Opportunity Commission complaints over the social network’s advertising. As part of the accord, the company will pay around $5 million in legal fees and compensation to consumers and job-seekers allegedly excluded from opportunities advertised on the platform.

Facebook said it will also study the potential for unintended bias in its algorithms, and will meet with the plaintiff groups every six months for the next three years to discuss implementation of the changes. Those groups include the Communications Workers of America (CWA) union as well as civil rights and housing organizations.

The deal doesn’t resolve a lawsuit filed by the CWA and a group of job-seekers against Amazon.com, T-Mobile and hundreds of other employers and employment agencies accused of using Facebook’s tools to filter out older job-hunters. On April 17, a federal judge in San Jose, California, is slated to hear arguments on whether to let that case proceed as a class action.

“It’s critically important that all of the companies that have misused Facebook’s advertising tools in the past be held accountable,” said attorney Peter Romer-Friedman, who represents plaintiffs in the settling cases, the proposed class action and dozens of pending EEOC claims. “Wherever they advertise, whether it’s a hiring hall or a job fair or through a server in Silicon Valley, it’s got to be equal. We want every company to agree to principles of equality for the future.”